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9/2/2015 7:25AM

China’s Market Turmoil Upends Banks' Expansion Plans

China’s booming markets and plans to further open up its financial system led banks, hedge funds and brokers to expand their businesses. But as the WSJ’s Ken Brown explains, the huge selloff in the markets and Beijing’s reaction to it will likely hurt these companies and could force them to scale back their expansion plans.

This transcript has been automatically generated and may not be 100% accurate.

... the first ever this year was a boom time for investors in China ... the country was opening up its markets and increasing access to its financial system ... banks and investment firms hired analyst attract Chinese stocks ... credit Suisse it was doubling the number of stocks recovered to three hundred ... hedge funds make big plans to attract investors and private equity firms are sitting on a high hill of investor cash ready to invest ... they will betting on a huge opening up of the Chinese financial system ... foreign investors were going to get new access to the country's stock bond and currency markets which are some of the biggest in the world ... the world has changed alot since then ... the Chinese market is down nearly forty percent and the small cap market were lots of investors made a fortune is down by more than half ... that's her performance of hedge funds ... they're still up three point three percent for the year now ... but they were up twenty six percent at the end of May ... the kind of performance this can be very hard to raise cash from investors ... the bigger issue has been China's effort to prop up its market to crack down on people it believes are pushing shares down ... that shows the Chinese markets don't operate bite marks to the West ... and won't look like that anytime soon ... for now banks investors and not sing with a to scale back to business anytime soon ... analysts say it's ... a very hard to attract new cash to these markets at some point anyone who has expanded its can have scaled back ...